Taiwan Dollar Appreciates Ahead of Export Data; Bonds Advance

Taiwan’s dollar advanced the most in six weeks as economists predicted exports grew for a 13th month, boosting speculation investors will increase holdings of the island’s assets.

The currency gained for a third day as Federal Reserve Chairman Ben S. Bernanke said the purchase of more bonds beyond the $600 billion announced last month is “certainly possible,” according to a transcript of an interview on CBS Corp. Overseas shipments rose 18.9 percent in November from a year earlier, compared with an increase of 21.9 percent the previous month, according to the median estimate of economists in a Bloomberg survey before a finance ministry report tomorrow. Bonds gained.

“Economic data is still in a healthy situation,” said Yili Tang, head of the currency division at Shinkong Life Insurance Co. in Taipei. “Hot money will come into Asia, no doubt. The central bank will control the market.”

Taiwan’s dollar ended 0.4 percent stronger at NT$30.625 against its U.S. counterpart, according to Taipei Forex Inc. The currency has appreciated 3.4 percent so far this quarter, the best performance among Asia’s most-traded currencies.

Overseas funds bought $102 million more Taiwan stocks than they sold today, boosting net purchases this year to $7.06 billion, according to exchange data.

The Taiwan currency was up 2 percent a minute before the close and later trimmed gains as the central bank sold the local dollar, said a trader familiar with the authority’s operations, who declined to be identified.

CPI Data

The island’s dollar has pared gains or weakened in the final minutes of trading on most days in the past eight months as policy makers bought the U.S. dollar, according to traders familiar with the central bank’s operations who declined to be identified. Central banks intervene in currency markets by arranging purchases or sales of foreign exchange.

Taiwan’s consumer-price index gained 1.5 percent last month after increasing 0.6 percent in October, the statistics bureau said in Taipei today. The median of 11 economists in a Bloomberg survey was for a 0.9 percent gain.

The yield on the 2 percent note due July 2015 fell one basis point to 0.990 percent, according to Gretai Securities Market, the island’s biggest exchange for bonds. A basis point is 0.01 percentage point.

To contact the reporters on this story: Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net; Yu-Huay Sun in Taipei at ysun7@bloomberg.net.

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

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